LBC Express hopes to complete follow-on offering next year

MANILA, Philippines - Araneta-led LBC Development Corp. is likely to proceed with the planned follow-on offering of LBC Express Inc. in the first quarter of next year as it is still seeking the nod of the Securities and Exchange Commission (SEC).

In a chance interview, LBC Development chairman and chief executive officer Santiago Araneta said the offering would likely proceed in the first quarter instead of this year because the schedule is too tight given the holiday season.

“We will probably get the approval after the year ends,” Araneta said.

LBC Development, the key shareholder of courier services operator LBC Express Inc., gained control of dormant listed company Federal Resources Investment Group, paving the way for the backdoor listing of LBC Express.

In October, the SEC approved the change in corporate name of Federal Resources to LBC Express.

The company plans to raise P829 million from the follow-on offering of 69.1 million common shares at a maximum offer price of P12 per share. Proceeds are intended to finance acquisitions and fund its organic expansion plans, as well as for general corporate purposes.

This is significantly lower than the P7 billion that LBC Express originally intended to raise from a planned initial public offering in 2013 which did not push through.

LBC plans to continue with its current rate of expansion in terms of the number of new branches. Yearly, the company develops 50 to 60 new branches.

“The company’s target is to reach at least 1,250 branches in the Philippines by end of 2017,” it said in its prospectus filed with the SEC.

Araneta said postponing the offering next year would not be a problem even as the company had hoped to do it in November.